Facebook in trouble as Four firms reaches US court for anti-competitive action

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Facebook in trouble as Four firms reaches US court for anti-competitive action
Facebook in trouble as Four firms reaches US court for anti-competitive action :File Photo

Facebook has been sued by Four firms for anti-competitive action,asked US court to order Mark Zuckerberg to give up control of the company.

Four companies sued Facebook Inc in United States federal court on Thursday for alleged anti-competitive conduct, saying the social network inappropriately revoked developer access to its platform in order to harm prospective competitors.

The plaintiffs asked for a court order to force Chief Executive Officer Mark Zuckerberg to give up his control of the social media giant and sought class-action status and unspecified damages, according to a filing at the US District Court for the Northern District of California.

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The lawsuit was filed in San Francisco by Reveal Chat HoldCo LLC, a successor to the dating site LikeBright; USA Technology and Management Services Inc, better known as the credit and financial service provider Lenddol; former peer-to-peer site Cir.cl Inc; and former identity verification provider Beehive Biometric Inc.

The companies describe Facebook as “one of the largest unlawful monopolies ever seen in the United States” and say the aim of the lawsuit is “to halt the most brazen, willful anti-competitive scheme in a generation”.

If Facebook is not forced to sell its WhatsApp and Instagram assets, it would integrate them into the social network, “consolidating its market power across the globe, likely permanently foreclosing competition in the relevant markets for decades to come”, the firms said.

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Facebook faced an existential threat from mobile apps, and while it could have responded by competing on the merits, it instead chose to use its might to intentionally eliminate its competition,” said Yavar Bathaee, a partner at law firm Pierce Bainbridge and co-lead counsel in the case.

The social media giant defended itself, saying the claims were “without merit”.

“We operate in a competitive environment where people and advertisers have many choices,” Facebook said in an emailed statement to Bloomberg. “In the current environment, where plaintiffs’ attorneys see financial opportunities, claims like this aren’t unexpected but they are without merit.”

Facebook opened its platform to developers when it needed their help to catch up in the early 2010s to the fast-growing mobile market and then gave many of them the boot when it no longer needed them or started to see them as rivals, the companies claim in the lawsuit.

The company cut off many developers’ access to user data, rendering their apps useless and forcing some out of business, according to the lawsuit.

The filing is an escalation of Facebook’s battles with small app developers that had built companies based on access to its user data. Facebook cut off access for certain apps as far back as 2012, while still allowing access for others.

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Thousands of pages of damaging internal emails have emerged from a similar lawsuit filed by Six4Three, the developer of a now-shuttered bikini photo app. Facebook has described the Six4Three case as baseless.

Facebook in trouble as Four firms reaches US court for anti-competitive action.